Many local services face severe cutbacks due to spiralling costs caused by inflation and demand pressures, the Local Government Association (LGA) is warning ahead of the Autumn Statement.
The LGA is clear that the scale of the funding gaps faced by councils is too big to be plugged by council tax increases alone. To do so, councils would need to put up council tax by up to 20% over the next 2 years. This is neither sustainable nor desirable given the current cost of living crisis.
Ahead of the Chancellor’s fiscal event tomorrow (Thursday), a survey by the LGA reveals all responding councils are facing additional cost pressures which were not included in their budget for this year.
It comes as councils are battling to find an extra £2.4billion this year to meet unforeseen extra inflationary cost pressures, energy prices rises and estimated increases to the National Living Wage since budgets were set in March. In particular, the LGA survey shows councils are experiencing additional financial pressure or risk from pay pressures (94%), energy price increases (96%) and uplifts in contract prices or re-negotiations (90%).
Most councils are planning to use reserves and make cutbacks to services to plug funding gaps so that they can meet their legal duty to balance the books this year. However, there are not enough reserves to continue to plug funding gaps in future years, as they can only be spent once. Using up all revenue reserves would leave councils at high financial risk and will lead to even greater cuts.
Even if councils cut all spending on cultural and leisure services such as libraries, swimming pools, open spaces, waste collection and trading standards they would still not have saved enough money to plug this gap.
It was only on Monday that the Isle of Wight Council said they needed to evaluate the state of leisure centres on the Island, warning that they could be closed if much-needed funding for social care isn’t found.
Councillor James Jamieson, LGA Chairman, said:
“Local government remains the fabric of our country but many of the vital services we provide face an existential crisis. Inflation is not going to come down overnight; reserves can only be spent once, and a local service cannot be cut twice.
“Rising demand for services – and the extra costs to provide them – means that even having the same funding next year as they had this year would leave councils having to make significant cuts to services, such as care for older and disabled people, protecting children, homelessness prevention, leisure centres and bin collections.
“While council tax is an important funding stream, it has never been the solution to the long-term pressures facing councils, raising different amounts in different parts of the country – unrelated to need – and adding to the financial pressures facing households.
There is no way I’m paying more for the under performing IWC .. year on year increases and year on year services being stopped, whilst they waste our money .. floating farce .. and many more ..
You’ll be paying for the exactly same value of services though, just with weaker currency.
It’s all looking very bleak. So sad that cut backs could see Libraries and Leisure Centres close. These times are the worst I have ever experienced. Food Banks exist because people cannot afford to eat, even though they have a job! It’s a terrible situation, it’s disgusting. When will it all end? My guess is, get the Conservatives out of Government and let Labour try and fix 12 years of Tory co*k ups and misery!
We certainly cannot afford anymore Council Tax increases, many are struggling now. It’s just so worrying.
The plan from day 1 was to crash the economy and bring in a social credit system like China.
It’s happening, it’s all part of the WEF Re-Set.
Would be the worst thing ever if Labour got to power..
Council pay huge amounts for residential of children and adults as private providers know the market and can name price,local authority £600 per week, private £3000/£20000 (£1million a year). Government needs to put a stop to private agencies making profits of 50/60% on each placement and they need to look more at supporting financially and practically those carers who are carrying out care within family,who are at breaking point and leads to more coming into care. Council are spending more on 1 placement than they do on prevention of dozens of others that then break down and need care. So much wasted on crises and no prevention/support.
If a massive increase like that happens there will be riots I can assure you of that. People simply cannot afford it and will not pay it. Raise the tax for people who 1: Don’t live here 2: 2nd, 3rd 4th home owners over here should face a 50% to 75% CT increase on extra properties they own. Here comes 1977 again. This council didn’t take long to latch onto to the relax in increase limits did they, now there is a surprise. 20% is bloody ridiculous.
they can make cuts
start with those three people costing over a million a year, as Karl love advised in anorher IE report.
then stop spending a million a year on taxis for SEND kids….parents can pay.
that is two million of savings immediately
do not accept or pay for any asylum seekers, no more taxpayer funded moves to the island and cut the bloated Council headcount.
they should be thinking….taxpayers can’t afford to pay more, so we need to cut more
I’m sure that the thousands of Asylum Seekers on the Island are the problem (!)
Eejit.
even just one, is a cost that should not be incurred by the islands taxpayers
Stop wasting tax payers money on stupid things ect ,I would of thought with all new houses and outlets popping up left right and centre would generate a huge income,let’s not forget the parking increase and now all year round pay to park,thief’s the lot off ya
And we all know who twice voted to massive cuts to Council funding, don’t we.
Bob, half a sausage, Seely.
Still no sign of his manifesto centrepiece “Island Deal” I see.
time to get real, start sacking the hoards of office staff, people need to unite and just stop paying.
No way people can afford that we will have people out on the streets living in the gutter , the work that council tax pays for needs to be streamlined for accountability wastage cut Overheads cut etc etc
Who’s fill ing the gap the homeowners are facing ,,, no one,we have to cut right back to survive
usual story steph
government is handing more money to the bleeding hearts and sob stories on benefits, as well as paying for sponging economic migrants to live in hotels, whilst rinsing every penny out of those that don’t claim benefit and who work and pay their way in life.
these types of policies only end up with more giving up work, as it becomes a better option to do nothing, with lower quality services, as more demand, yet less staff as they are now claimants, rather than workers.
the government talk of low unemployment of just over a million, however, there are nine million economically inactive people in the uk – all sponging off the state, who aren’t classed as unemployed. cut benefits and get them back to work.
Sounds like a sales pitch. So when our council of secrets and money for the feckless, put it up by 19.9%, They can claim it’s less than allowed by central government.
Council Tax should be part of someone’s income.
Therefore a much fairer system.
The more you earn the more you pay.
Time to Abolish council tax
Would that 20% increase be to cover the vastly increasing wage bill of the Council, along with all the other money wasted along the way in different ventures?
Nearly time for a complete breakdown of the individual posts held within County Hall and what jobs the individuals actually do to justify a return to the general public who actually pay their wages.
Perhaps we all should pack up work and get housing and council tax paid for
Great idea.
MPs are a bunch of bums, they claim for everything on expenses and don’t pay Council tax etc
They are the biggest benefit scroungers in the country along with the Royals.
And to pay for the new Council person…
It was much fairer with the old rates system…….
Now too many Chiefs with their fingers in the pie !!!!!
And we pay for them ….
This is daylight robbery….
Pay more get less …..
Excuse after Excuse….
If you earn a set amount per month, it’s not elastic it only goes so far …..
Stretch it and it will snap….
A bit like the constituents….
Rates were much fairer
Council Tax on the Island is more expensive than all London Boroughs
I wander why sometimes that councillors do not reply or at least comment on these pages,just shows they don’t listen to tax payers
People going mad about price of gas and electric. But all most get from astronomical council tax, is a bin collection?. Yet county and local town council want more. Never a thought for many struggling to pay it.
Why increase council tax, just charge islandwide permit parking instead.
Three things have caused all this.
Greed of the oil companies,blatant war profiteering and an incompetent government.
Stop voting Tories at every level, complete failures across the board. Look at the state of this country.
it was worse under labour -not that that is saying much